I made my tradig journal more systematic. As a daytrader my trade decision is so micro that I wrote all my analysis that day.

So far so good that I could navigate my trading-ship where the market went. My next tasks will be:1. Wrote my plan and execute based on those.2. Recording the chart based on my journal at my blog along with my journal notes.

Thursday, November 5, 2009

For the last 2 months I had a horrible drew down from my trading. Kept doing wrong, don't know what happened at the market. I lost more than $5000 in just 2 months.

Yet start this November, I made my decision to trade like never before. I stopped looking at other's chart / analysis, Reduce my attention to news, and Re-building my definition of trading. Til this day from 1st November I haven't been trading yet.I just Paper Trade.

I bought a black book to record every detail of my thought when market open. I wrote the time, what happened, and execute with my paper trade.

Surprisingly I found a method that very simple, effective, very market approach, and every single day I learned a new thing.

I don't think I never found what I got now if I didn't had big losses. I still have a long walk to strengthen my trade.

As the result my paper trade reached 100% return less than 2 months. with initial paper trade $20.000,-

My method involved:1. Pivot Point Target2. Moving Average3. Time and Tick ChartAnd for the supportive I also watch:1. TICK2. ES & YM Chart3. Sector and Market

Wednesday, November 4, 2009

The age-old axiom of trading is that we are to “cut our losses short, and let our profits run”. I’ve realised that what we tend to do best is the exact opposite! If we don’t condition ourselves to overcome our most natural trading insincts, chances are that we tend to “cut our profits short, and let our losses run”. Indeed, latest research in behavioral finance has revealed what traders and investors of all ages have always done, i.e. the fact that we tend to take more risk with losing positions, and become very risk-averse with winning positions. This “asymmetry” or inconsistency causes us to be unwilling to take losses and also to take profits too soon. Traders are unwilling to let a trade hit a stop-loss point, because humans are conditioned to avoid immediate pain; moving (or even removing) a stop-loss order allows one to delay the pain of taking a loss, and hopefully avoid it! With regard to profit-taking, many traders fear that a profit might “evaporate” away and take it too soon. This habit gives the immediate relief or pleasure of “locking” in profits.

If you think about it carefully, these two habits will guarantee that our profits are not sufficient to pay for our losses. Even with a high win rate, you could end up losing money!!! The right way to trade is to ensure that our profits are , on average, bigger than our losses. This is why many winning traders can be very profitable despite having a modest win rate of only slightly more than 50%. Winning traders really practise the basic principle of letting our profits run and cutting our losses short!